“The phrase, ‘knowledge is power’ is a popular adage, but is it understood?” ask the experts at Stanley Laman Group. The idea is that through knowledge, you gain options, which ultimately gives you the power to make informed decisions.
Knowledge itself is primarily acquired four ways: observation, inference, education and experience. Today’s investors are also turning to social media platforms as a source of information and credibility, before making buying or investing decisions.
There are few who would debate the merits of education as a viable source of knowledge. From our earliest years, education is a cornerstone of intellectual growth. Observational skills tend to rest more heavily within the realm of a natural gift although the skill can be learned. This is typically found within careers where skills of observation are essential to success, as is often the case with the financial investment industry. Taking a ‘head in the sand’ approach within this high risk environment can lead to catastrophic consequences on a personal and financial level.
Experience is knowledge gained through day to day interactions, the ‘school of life’ so to speak. Negative and positive experiences both contribute to an inventory of knowledge that provides the framework for making better, or at least more informed, decisions in the future.
When it comes to our finances, most people tend to lean towards sources of knowledge that can be empirically proven with hard facts. Inference is highly valued in the financial industry as the process to arrive at logical conclusions using the balance of evidence combined with reasoning. The foundational decision-making process is linked to observation, inference, education, and experience, to come up with an idiomatic option.
The financial crisis of 2008 has not been forgotten by many Americans. Many are recovering and concerned about their futures and what retirement holds in store. In addition to the American public, investors in the retail and manufacturing industries were heavily impacted by the crisis. Investors within these areas are focused on recovering their losses, creating contingency plans to avoid similar hits in the future, and researching wealth generation options for the future.
The Internet is flooded with information and knowledge on ways to thrive in retirement. Pundits and amateurs alike are weighing in through articles, blog posts, white papers, and videos. They are offering advice on how to recover from the crisis, take steps to prevent future financial hits, and how to best prepare for retirement.
"Now people can get financial information at any time, but it seems more and more it is becoming more like entertainment than reliable information," said William Stanley of the Stanley Laman Group.
Using the Internet as a source of knowledge must be approached with caution. It goes without saying, just because it is in print, doesn’t make it true. Internet hoaxes can be well funded and meticulously designed, with a professional appearance. Their sole goal is to encourage you to drop your defenses in order to be easily duped by the hoax.
Laziness and complacency are not options when using the Internet as a resource for financial advice and guidance. A top priority should be to make sure the information provided is not a scam or a hoax. Spotting fakes on the internet is not easy for the average person.
Imaginative and sensational information attracts people easily and draws them in. The majority of people do not have the ability to recognize a lie or fabrication. The sites are designed to induce them to lower their defenses. The reliability of the Internet is not questioned by most people. They have the belief that it is a source of reliable information.
“Exceptional claims should be supported by multiple sources of high quality and reliability,” William Stanley, a top executive at Stanley Laman Group, said.
The goal should be to find out if the person giving the advice is 100% unbiased, with valid professional credentials and designations.
Look for professionals who seem to meet your goals. There are a number of ways to check out their backgrounds. You can go to BrokerCheck, a tool on FINRA’s (Financial Industry Regulatory Authority) website. You can search for brokers and firms that are registered with their site. You can find information about their education and whether they have a history of complaints.
Another resource is the Certified Financial Planner Board of Standards website. It lets you look for planners based on issues such as their specialization and compensation. You can also see if a planner has been publicly disciplined by the board.
Working with a qualified, experienced and credible financial investment advisor not only provides a level of confidence, but there’s accountability. A credible advisor or investment advisor company has invested their money and time in building a positive reputation. They simply cannot afford to deal in hoaxes or inaccurate information.
The most significant credential for personal financial advisors is Certified Financial Planner (CFP.) They are regulated by the Certified Financial Planning Board of Standards. In order to earn this designation, the Board requires applicants pass a rigorous test about the specifics of personal finance. Once designation is earned, CFP’s must commit to ongoing education in financial matters, and ethics classes in order to maintain their designation.
Designations and Boards don’t always guarantee the level of skills and credibility you deserve or need. Independent and meticulous research is still recommended to ensure you’re partnering with the right advisor or firm to help you achieve your goals, with the highest level of confidence in their services.
Long-term portfolios should be based on unbiased advice, diversification, tax efficiency, and low-fee index funds. Research shows trying to 'beat' the market does not work for everyday investors. Investors shouldn't have to actively manage their investment accounts: the right things should happen automatically.
“All investors - not just those with million-dollar account balances - deserve top tier investment management for their portfolios,” notes William Stanley of the Stanley Laman Group.